Trials@uspto.gov
`571-272-7822
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` Paper 32
`Entered: May 29, 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.
`
`
`
`DECISION
`Motion for Additional Discovery
`37 C.F.R. §§ 42.51(b)(2) and 42.224
`
`

`

`Case CBM2013-00005
`Patent 7,941,357
`
`
`INTRODUCTION
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`Markets-Alert Pty. Ltd. (“Markets-Alert”) filed a motion for additional
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`discovery seeking production of information considered by a declarant, prior art
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`and information considered by Bloomberg et al. (collectively “Bloomberg”), and
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`information related to licensing and commercial implementation.1 (“Mot.” Paper
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`28; Ex. 2021.) Bloomberg opposes. (“Opp.” Paper 31.) We have considered each
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`item in the request of Markets-Alert and Bloomberg’s opposition. For the reasons
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`discussed below, Markets-Alert’s motion for additional discovery is granted-in-
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`part.
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`DISCUSSION
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`The purpose of the Leahy-Smith America Invents Act (“AIA”) is to establish
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`a more efficient and streamline patent system that will improve patent quality and
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`limit unnecessary and counterproductive litigation costs. To achieve that goal, the
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`AIA created new administrative trial proceedings to be conducted by the Board,
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`including covered business method patent reviews, as a cost-effective alternative to
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`litigation. It is recognized that limited discovery lowers the cost, minimizes the
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`complexity, and shortens the period required for dispute resolution. Consistent
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`with the statutory provisions and legislative intent of the AIA, there is a strong
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`public policy to limit discovery in administrative trial proceedings, as opposed to
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`the practice in district court patent litigations that have broad discovery.
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`While an interests of justice standard is employed in granting additional
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`discovery in inter partes reviews, a good cause standard is applied in post-grant
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`reviews and covered business method patent reviews. 37 C.F.R. §§ 42.51(b)(2)(i)
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`
`1 In its prior Order, the Board authorized Markets-Alert to file a motion for
`additional discovery and Bloomberg to file an opposition. (Paper 27.)
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`
`
`2
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`

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`Case CBM2013-00005
`Patent 7,941,357
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`and 42.224.2 On balance, the interests of justice standard is a slightly higher
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`standard than the good cause standard, to reflect that the scope of issues which
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`could be raised by a petitioner in an inter partes review is limited to grounds based
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`on patents or printed publications. Id.
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`Notwithstanding the different standards, the legislative intent for those
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`administrative trial proceedings shares the same principle that each review should
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`be an efficient, streamlined, and cost-effective alternative to district court
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`litigation. The statutory provisions for inter partes reviews, post-grant reviews,
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`and covered-business method patent reviews caution against overly broad
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`discovery3 and provide the same considerations, including efficient administration
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`of the Office and the ability of the Office to complete the proceeding timely.4
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`Moreover, as stated in the legislative history, “[g]iven the time deadlines imposed
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`on these proceedings, it is anticipated that, regardless of the standards imposed in
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`[35 U.S.C. §§ 316 and 326], PTO will be conservative in its grants of discovery.”
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`154 Cong. Rec. S9988-89 (daily ed. Sept. 27, 2008) (statement of Sen. Kyl).
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`2 See also Changes to Implement Inter Partes Review Proceedings, Post-Grant
`Review Proceedings, and Transitional Program for Covered Business Method
`Patents, 77 Fed. Reg. 48680, 48693 (Aug. 14, 2012) (final rule).
`3
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` See 35 U.S.C. 316(a)(6) and 326(a)(6) (“The Director shall prescribe
`regulations. . . (6) prescribing sanctions for abuse of discovery, abuse of process,
`or any other improper use of the proceeding, such as to harass or to cause
`unnecessary delay or an unnecessary increase in the cost of the proceeding.”
`Emphasis added.)
`4
`
` See 35 U.S.C. §§ 316(b) and 326(b) (“In 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.” Emphasis added.)
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`
`
`3
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`

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`Case CBM2013-00005
`Patent 7,941,357
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`The Office promulgated the patent trial rules through rulemaking under the
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`authority of the AIA (e.g., 35 U.S.C. §§ 316 and 326). Consistent with the AIA,
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`regulations set forth in Part 42, Title 37, Code of Federal Regulations, including
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`the discovery rules for inter partes reviews, post-grant reviews, and covered-
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`business method patent reviews, must be construed to secure the just, speedy, and
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`inexpensive resolution of every proceeding. 37 C.F.R. § 42.1(b).
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`Markets-Alert as the moving party has the burden of proof in establishing
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`entitlement to the requested relief. 37 C.F.R. §§ 42.20(c), 42.51(b)(2), and
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`42.224.5 In its prior Order, the Board advised Markets-Alert to keep the statutory
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`and regulatory considerations in mind when filing a motion for additional
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`discovery. (Paper 15, 4-5.) For further guidance, the Board directed the parties’
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`attention to the factors set forth in “Decision – On Motion For Additional
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`Discovery” entered in IPR2012-00001. See Garmin International, Inc. et al. v.
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`Cuozzo Speed Technologies LLC, IPR2012-00001, Paper No. 26 at 6-7 (PTAB,
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`Mar. 5, 2013).
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`Those same factors are helpful in determining whether discovery requests
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`may be granted in covered business method patent reviews. As discussed
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`previously, administrative trial proceedings share the same public policy, statutory,
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`and regulatory considerations of discovery. For covered business method patent
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`review, we slightly modify each of the five factors set forth in Garmin, for
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`determining whether the requested discovery is necessary for good cause.
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`5 37 C.F.R. § 42.224 Discovery.
`Notwithstanding the discovery provisions of subpart A:
`(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.
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`
`
`
`4
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`

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`Case CBM2013-00005
`Patent 7,941,357
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`
`Discovery Factors for Covered Business Method Patent Review
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`1. More Than A Possibility And Mere Allegation—
`The mere possibility of finding something useful, and mere allegation
`that something useful will be found, are insufficient to establish a
`good cause showing. “Useful” means favorable in substantive value
`to a contention of the party moving for discovery. A good cause
`showing requires the moving party to provide a specific factual reason
`for expecting reasonably that the discovery will be “useful.”
`
`2. Litigation Positions And Underlying Basis—
`Asking for the other party’s litigation positions and the underlying
`basis for those positions is insufficient to demonstrate that the
`additional discovery is necessary for good cause. The Board has
`established rules for the presentation of arguments and evidence.
`There is a proper time and place for each party to make its
`presentation. A party may not attempt to alter the Board’s trial
`procedures under the pretext of discovery.
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`3. Ability To Generate Equivalent Information By Other Means—
`A party should not seek information that reasonably can be generated
`without a discovery request.
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`4. Easily Understandable Instructions—
`Instructions and questions should be easily understandable. For
`example, ten pages of complex instructions for answering questions is
`prima facie unclear. Such instructions are counter-productive and
`tend to undermine the responder’s ability to answer efficiently,
`accurately, and confidently.
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`5. Requests Not Overly Burdensome To Answer—
`Requests must not be overly burdensome to answer, given the
`expedited nature of a covered-business method patent review. The
`burden includes financial burden, burden on human resources, and
`burden on meeting the time schedule of the trial. Requests should be
`sensible and responsibly tailored according to a genuine need.
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`
`
`
`5
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`

`

`Case CBM2013-00005
`Patent 7,941,357
`
`
`Information Considered by Declarant
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`Markets-Alert requests the production of all documents and things
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`considered by Dr. Steven R. Kursh, Bloomberg’s expert, in conjunction with the
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`preparation of his declaration filed in this proceeding (Request 3). (Mot. 2;
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`Ex. 2021, 8.) Markets-Alert asserts that the evidence sought is necessary for
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`cross-examining Dr. Kursh with respect to his testimony on claim construction and
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`the state of the art at the time of filing. (Mot. 7.) In its opposition, Bloomberg
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`argues that it has provided the necessary information, and to the extent that
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`Markets-Alert’s request goes beyond the provided information, the request is
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`unduly broad. (Opp. 6-7.)
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`Applying the Factors to the facts related to Request 3, we determine that
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`Markets-Alert sufficiently demonstrates specific factual reasons for expecting that
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`there are other items which the declarant relied on in providing the declaration.
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`We first note that Request 3 is specific and tailored narrowly, seeking information
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`from one individual that is related to a single declaration on the issues raised by
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`Bloomberg in its petition. As support, Markets-Alert provides two specific
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`examples, which Markets-Alert believes that Dr. Kursh’s testimony is relying upon
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`evidence other than the cited prior art reference. (Mot. 7. “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 [Patent 7,941,357 (‘the ’357
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`Patent’)];” and “Kursh summarily opines that one of skill in the art would consider
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`the matching of buy and sell orders in Satow to constitute technical analysis.”)
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`In its submission of the declaration, Bloomberg provides a list of
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`information considered by Dr. Kursh. (Ex. 1002, Appendix B, 45-46.) Bloomberg
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`also implies that that list is complete. (Opp. 6-7.)
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`6
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`

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`Case CBM2013-00005
`Patent 7,941,357
`
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`Given those facts, we determine that Request 3 is necessary for good cause.
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`Accordingly, the Board grants Markets-Alert’s motion for additional discovery as
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`to the production of all documents and things reviewed or considered by Dr. Kursh
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`in conjunction with preparation of his declaration, but only to the extent of Dr.
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`Kursh’s recollection. However, Markets-Alert’s instructions (Ex. 2021, 4-5,
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`¶¶ 16-17) do not apply to that production of documents and things. See Order
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`section of this decision below.
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`Prior Art Known to Bloomberg and Information Considered by Bloomberg
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`Markets-Alert requests the production of prior art known to Bloomberg that
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`was not submitted in the petition (Request 1), and documents and things reviewed
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`or considered by Bloomberg in conjunction with the preparation of the petition
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`(Request 2). (Mot. 2; Ex. 2021, 8.) Upon consideration of Markets-Alert’s
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`requested items and arguments, we determine that Markets-Alert has not met its
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`burden to show that the requested discovery is necessary for good cause.
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`In support of Requests 1-2, Markets-Alert contends that “the undisclosed
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`prior art would be highly probative and favorable in substantive value to Markets-
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`Alert.” (Mot. 4) In particular, Markets-Alert argues that the prior art known to
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`Bloomberg is “highly relevant to this proceeding as they inform the level of
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`ordinary skill and the state of the relevant art at the time of filing.” (Id.) Markets-
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`Alert also alleges that if the requested prior art is disclosed, it would be “able to
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`avoid unnecessary arguments and amendments.” (Mot. 5.) According to Markets-
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`Alert, the requested prior art is “unfavorable to Petitioners’ position” and therefore
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`it “will likely be favorable to Markets-Alert and useful in this proceeding.”
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`(Mot. 5-6.) Markets-Alert further asserts that the requested information is “crucial
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`to fully analyzing the positions advanced by Petitioners.” (Mot. 6.)
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`7
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`

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`Case CBM2013-00005
`Patent 7,941,357
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`We are not persuaded by Markets-Alert’s arguments, as they are highly
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`speculative and do not provide sufficient factual reason to demonstrate that
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`something “useful” will be uncovered (see Factor 1). As Bloomberg points out,
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`Markets-Alert is seeking prior art and information that are irrelevant to the
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`instituted grounds of unpatentability. (Opp. 3.) While those prior art and
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`information sought by Markets-Alert were considered by Bloomberg, they are not
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`relied upon to support the asserted grounds of unpatentability.
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`On this record, we also observe that the prior art and information sought by
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`Markets-Alert, at best, is merely cumulative to the prior art already submitted by
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`Bloomberg on the record. To the extent that the requested prior art and
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`information are inconsistent with Bloomberg’s position, Bloomberg already
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`confirmed that it has produced all information covered by 37 C.F.R.
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`§ 42.51(b)(1)(iii) as routine discovery. (Paper 27, 3.) Further, Bloomberg is not
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`required to cite cumulative prior art. Indeed, redundant grounds based on
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`cumulative prior art are not warranted. See Order denying redundant grounds,
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`Liberty Mutual Ins. Co. v. Progressive Casulty Ins. Co., CBM2012-00003, Paper 7
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`(PTAB, Oct. 25, 2012). Moreover, as noted by Bloomberg, reasons behind why
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`Bloomberg disclosed some prior art, but not others, do not present a genuine need
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`for the items sought, as the requests seek Bloomberg’s litigation positions and the
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`underlying basis for those positions (see Factor 2). (Opp. 5-6.)
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`In its motion, Markets-Alert does not provide any explanation as to why its
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`own prior art search or expert opinion could not have identified prior art or
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`information necessary to inform Markets-Alert on the state of the art and claim
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`construction (see Factor 3). Markets-Alert also fails to explain why it could not
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`avoid unnecessary arguments and amendments using the result of its own prior art
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`search or expert opinion.
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`8
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`

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`Case CBM2013-00005
`Patent 7,941,357
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`As to Markets-Alert’s argument that the requests pose no burden, Markets-
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`Alert’s argument is not commensurate with the scope of the requests. That
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`argument narrowly focuses on the information possessed by Petitioners’ counsel.
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`(Mot. 4 “what is likely already sitting in a computer file of Petitioners’ counsel.”)
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`In fact, Markets-Alert’s requests broadly cover information actually or
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`constructively possessed by every present and former employee and any other
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`persons acting or purporting to act on behalf of Bloomberg. (Ex. 2021, 4-5,
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`¶¶ 16-17 “These requests for production seek all information that is known to you,
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`your representatives, agents or investigators, and unless otherwise privileged, their
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`counsel, employees, representatives, agents, servants, investigators or consultants;”
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`and “[t]hese requests for production seek all [d]ocuments and things that are in the
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`actual or constructive possession, custody, or control of the responding party
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`and/or the responding party’s present and former employees, officers, directors,
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`agents, representatives, attorneys, accountants, underwriters, investigators, or other
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`persons acting or purporting to act on behalf of the responding party.”) Such
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`instructions that include numerous individuals are unduly broad and burdensome
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`(see Factor 5). Additionally, these broad instructions would cause unnecessary
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`substantial delays, as the instructions would place an obligation on Bloomberg to
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`identify numerous individuals and require each individual to make a diligent search
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`for information.
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`For the foregoing reasons, Markets-Alert’s motion for additional discovery
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`as to Requests 1 and 2 is denied.
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`9
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`Case CBM2013-00005
`Patent 7,941,357
`
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`Items Related to Licensing and Commercial Implementation
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`Markets-Alert requests additional discovery for the following items:
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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; and
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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.
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`(Mot. 2; Ex. 2021, 8, Requests 4-5.)
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`
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`In its motion, Markets-Alert essentially contends that the items to be
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`discovered would be probative to its potential assertion of secondary
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`considerations of nonobviousness including copy by others, failure of others,
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`commercial success, and long-felt but unresolved need. (Mot. 8-10.) We have
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`considered Markets-Alert’s requests for additional discovery and arguments.
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`On this record, we however determine that Markets-Alert has not met its burden to
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`demonstrate that the requested additional discovery is necessary for good cause.
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`
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`Markets-Alert’s arguments with respect to why Requests 4-5 are necessary
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`for good cause are highly speculative and not meaningful. Although Markets-Alert
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`alleges that the requested information would have potential probative value,
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`Markets-Alert fails to provide a specific factual reason or evidence for expecting
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`that the discovery will be “useful.” Markets-Alert’s contentions are merely
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`allegations that something useful will be found, which are insufficient to
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`demonstrate that the requested additional discovery is necessary for good cause
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`(see Factor 1). For instance, as Bloomberg points out, rather than identify any
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`specific licensing proposals, communications, or commercial implementations, the
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`10
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`Case CBM2013-00005
`Patent 7,941,357
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`requests are directed vaguely to anything relating to a long list of hypothetical and
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`unspecified activities over an eleven-year time period. (Opp. 8-9.) Markets-Alert
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`also fails to provide any specific factual reason or credible evidence to show that
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`Bloomberg or anyone had tried but failed to develop a method having the claim
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`features of the ’357 patent.
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`Markets-Alert does not direct our attention to any evidence that Bloomberg
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`sought to license from or copied the claimed subject matter of the ’357 Patent.
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`Even if there is a licensing agreement involving the ’357 patent, Markets-Alert
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`fails to provide adequate explanation or evidence to establish nexus between the
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`merits of the invention and such a licensing agreement. Without a showing of
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`nexus, the mere existence of licenses is insufficient to overcome the conclusion of
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`obviousness. Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1324 (Fed.
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`Cir. 2004); SIBIA Neurosciences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349,
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`1358 (Fed. Cir. 2000).
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`
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`With respect to Markets-Alert’s potential assertion of long-felt but
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`unresolved need as secondary consideration of nonobviousness, Markets-Alert fails
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`to explain why it could not rely on its own analysis of the state of the art or the
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`opinions of independent analysts without a discovery request (see Factor 3).
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`As discussed previously, Markets-Alert’s instructions set forth in its request
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`for additional discovery (Ex. 2021, 4-5) are overly broad, which would require
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`numerous individuals to search and produce the requested information. Those
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`instructions would place an undue burden and cause unnecessary substantial delays
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`(Factor 5).
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`For the foregoing reasons, Markets-Alert’s motion for additional discovery
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`as to Requests 4 and 5 is denied.
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`11
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`Case CBM2013-00005
`Patent 7,941,357
`
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`In consideration of the foregoing, it is hereby:
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`ORDER
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`
`
`ORDERED that Markets-Alert’s motion for additional discovery is granted
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`as to the request for production of all documents and things reviewed or considered
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`by Steven R. Kursh in conjunction with the preparation of his declaration, but only
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`to the extent of Dr. Kursh’s recollection; and Markets-Alert’s instructions
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`(Ex. 2021, 4-5) shall not apply to that production of documents and things;
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`FURTHER ORDERED that, unless previously served, Bloomberg must
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`serve Markets-Alert, by June 4, 2013, a copy of all documents and things reviewed
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`or considered by Dr. Kursh in conjunction with the preparation of his declaration
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`(Ex. 1002), to the extent of Dr. Kursh’s recollection; and
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`FURTHER ORDERED that Markets-Alert’s motion for additional
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`discovery is denied as to all other requests for additional discovery (Requests 1-2
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`and 4-5).
`
`
`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
`
`
`
`12
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`