`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
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`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,
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`v.
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`MARKETS-ALERT PTY LTD.
`Patent Owner.
`____________
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`Case CBM2013-00005 (JYC)
`Patent 7,941,357
`____________
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`Before JAMESON LEE, SALLY C. MEDLEY, and JONI Y. CHANG,
`Administrative Patent Judges.
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`
`
`PATENT OWNER MARKETS-ALERT
`REPLY TO PETITIONERS’ OPPOSITION TO MOTION TO EXCLUDE
`PURSUANT TO 37 C.F.R. §42.64
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`TABLE OF CONTENTS
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`Page
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`INTRODUCTION ........................................................................................... 1
`I.
`F.R.E. APPLY TO THESE PROCEEDINGS ................................................. 1
`II.
`III. EXPERT TESTIMONY IS SUBJECT TO F.R.E. .......................................... 2
`IV. PETITIONERS FAIL TO REBUT DEFICIENCIES ..................................... 4
`V.
`CONCLUSION ................................................................................................ 5
`LISTING OF FACTS ........................................................................................... A-1
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`TABLE OF AUTHORITIES
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`Page
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`FEDERAL CASES
`ActiveVideo Networks, Inc. v. Verizon Communications, Inc.,
`694 F.3d 1312 (Fed. Cir. 2012) .............................................................................. 3
`Innogenetics, N.V. v. Abbott Labs.,
`512 F.3d 1363 (Fed. Cir. 2008) ..........................................................................3, 4
`Meyer Intellectual Props. Ltd. v. Bodum, Inc.,
`690 F.3d 1354 (Fed. Cir. 2012) ..........................................................................3, 4
`Microstrategy Inc. v. Business Objects, S.A.,
`429 F.3d 1344 (Fed. Cir. 2005) .............................................................................. 3
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`FEDERAL STATUTES
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`37 C.F.R. §42.62 ....................................................................................................1, 2
`Fed. R. Evid. 401 ....................................................................................................... 2
`Fed. R. Evid. 403 ....................................................................................................... 2
`Fed. R. Evid. 702 .............................................................................................. 2, 3, 4
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`I.
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`INTRODUCTION
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`Petitioners miss the point of this Motion. This Motion is about the threshold
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`evidentiary deficiencies in Petitioners’ expert testimony and New References.
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`Their nearly 10 pages of attorney argument on the potential probative value of this
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`evidence is irrelevant. Indeed, Petitioners’ improper focus on credibility and
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`weight only highlights their failure to rebut Markets-Alert’s demonstration of, for
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`example, the inherent unreliability of their expert’s conclusory opinions or the
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`cumulative nature of the New References.
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`This wrong direction taken by Petitioners is not surprising. Throughout
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`these proceedings, Petitioners’ strategy has been to avoid confronting Markets-
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`Alert’s detailed arguments and analysis head-on. Instead, Petitioners have
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`repeatedly attempted to block or expunge from the record Markets-Alert’s papers.
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`The last thing that Petitioners want to offer or have the Board consider is detailed
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`analysis. Petitioners would rather turn this proceeding into a battle of competing
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`conclusions.
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`II.
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`F.R.E. APPLY TO THESE PROCEEDINGS
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`Petitioners cannot and do not deny that, under 37 C.F.R. §42.62, the Federal
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`Rules of Evidence (FRE) apply to the current proceedings to ensure that evidence
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`is reliable enough to merit full consideration by the Board. Instead, Petitioners
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`argue that the Board somehow limited motions to exclude to only issues of
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`authenticity and hearsay. This is flatly contradicted by 37 C.F.R. §42.62 and is a
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`mischaracterization of the guidance provided by the Board.
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`It is true that authentication and hearsay are examples of FRE requirements
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`that must be met pursuant to 37 C.F.R. §42.62. This does not mean, as Petitioners
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`would claim, that the rest of FRE is inapplicable to these proceedings. For
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`example, Petitioners certainly do not argue that the fundamental relevancy
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`requirement in FRE 401 is inapplicable. Moreover, Petitioners never argue that the
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`Board’s discretion to exclude evidence for prejudice, confusion, waste or
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`cumulativeness under FRE 403 is inapplicable.
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`III. EXPERT TESTIMONY IS SUBJECT TO F.R.E.
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`Petitioners admit that expert opinions must meet the requirement under FRE
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`702 to be admissible: “(a) the expert’s scientific, technical, or other specialized
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`knowledge will help the trier of fact to understand the evidence or to determine a
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`fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony
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`is the product of reliable principles and methods; and (d) the expert has reliably
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`applied the principles and methods to the facts of the case.” These requirements
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`reflect a threshold level of reliability that expert opinions must meet. An expert
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`opinion that fails to meet FRE 702 is deemed so inherently unreliable as to be
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`inadmissible – i.e., conclusory. Yet, Petitioners incorrectly argue that the
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`conclusory nature of Kursh’s testimony is an issue of credibility and weight, not
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`reliability.
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`Charitably speaking, Petitioners’ incorrect argument may stem from their
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`misunderstanding of Federal Circuit precedent. For example, although Petitioners
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`themselves cite Microstrategy Inc. v. Business Objects, S.A., 429 F.3d 1344 (Fed.
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`Cir. 2005) in relation to FRE 702, they completely ignore that Court’s holding that,
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`“[w]hile an expert need not consider every possible factor to render a reliable
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`opinion, the expert still must consider enough factors to make his or her opinion
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`sufficiently reliable in the eyes of the court.” Microstrategy Inc. v. Business
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`Objects, S.A., 429 F.3d 1344, 1355 (Fed. Cir. 2005) (emphasis added).
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`This in turn leads to Petitioners’ misunderstanding of the significance of
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`ActiveVideo Networks, Inc. v. Verizon Communications, Inc., 694 F.3d 1312 (Fed.
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`Cir. 2012). ActiveVideo Networks and the other cases cited by Markets-Alert
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`frame the obviousness issues and analysis that an expert must consider per
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`Microstrategy in order for his conclusion to be “sufficiently reliable,”
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`notwithstanding the actual merit or weight of his conclusion. Failure to do so
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`renders the expert’s opinion unreliable. Petitioners’ own comparison of
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`Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363 (Fed. Cir. 2008) with Meyer
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`Intellectual Props. Ltd. v. Bodum, Inc., 690 F.3d 1354 (Fed. Cir. 2012)
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`demonstrates this principle. As compared to the expert testimony in Meyer which
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`did more than provide a conclusion, the expert opinion in Innogenetics was so
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`conclusory as to be held inherently unreliable.
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`IV. PETITIONERS FAIL TO REBUT DEFICIENCIES
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`Markets-Alert has no need to re-hash, in this Motion, Kursh’s lack of
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`credibility (e.g., his substantive inconsistencies, evasiveness and general inability
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`to support his testimony during questioning), which was previously addressed in
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`Markets-Alert’s Response. This Motion addresses the different matter of the
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`inherent unreliability of Kursh’s testimony under FRE 702. Ironically, Petitioners’
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`attempts to rehabilitate Kursh’s testimony suffer from the same problems plaguing
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`Kursh’s deficient opinions – they are just conclusory.
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`In each instance, instead of addressing the FRE 702 requirements raised by
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`Markets-Alert, Petitioners argue irrelevant points or only conclusorily assert that
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`Kursh’s opinions are well-grounded. For example, regarding Paragraph 46 of the
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`Second Kursh Decl., Petitioners argue that “charts” are an acceptable way to
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`present evidence. However, Kursh’s testimony is not deficient because he used a
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`chart form, it is deficient because there is no analysis, just a host of block quotes
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`and then a conclusion. Petitioners never show where Kursh does “more” than
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`provide a conclusion, i.e., address the missing FRE 702 bases or analysis.
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`With respect to the New References, Petitioners do not deny that the New
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`References are cumulative of the previously submitted references and do not deny
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`the risk of prejudice and confusion. Instead of directly challenging any of these
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`deficiencies, Petitioners again raise irrelevant points. For example, Petitioners
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`argue that their submission of the New References was authorized. But that is
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`beside the point. Authorization does not equal admissibility. That is why motions
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`to exclude are part of the schedule.
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`Finally, Petitioners’ comments about fairness are misdirected. Petitioners do
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`not deny that none of the New References would have shown up in a reasonable
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`search or were previously disclosed, or that Markets-Alert’s Preliminary Response
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`gives ample notice of Markets-Alert’s position with respect to the server-based
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`nature of the network of computers (the main feature for which Petitioners
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`submitted the New References), as well as the scope of technical analysis and real-
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`time. For Petitioners to now complain of fairness when they had every chance to
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`disclose references they had known about is disingenuous.
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`V. CONCLUSION
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`For the reasons set forth in its Motion and this Reply, Markets-Alert
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`respectfully requests that the Board grant its Motion to Exclude.
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`Dated: December 10, 2013
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`Respectfully submitted,
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`
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`Andrew Choung (USPTO Reg. No. 46,622)
`Email: achoung@glaserweil.com
`Arlyn Alonzo (USPTO Reg. No. 44,502)
`Email: aalonzo@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
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`LISTING OF FACTS
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`MARKETS-ALERT’S RESPONSE
`TO PETITIONERS’ LISTING OF FACTS
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`(1) On October 2, 2013, Petitioners submitted the Second Kursh Decl.
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`and New References in support of Petitioner’s Opposition to Patent Owner
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`Markets-Alert Motion to Amend (Paper 50) (“Opposition”) and Petitioner’s Reply
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`to Patent Owner Markets-Alert Response (Paper 51) (“Reply”). Markets-Alert
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`timely served its Objections to this evidence on October 8, 2013.
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`Bloomberg Inc. et al Response: Denied. Petitioner’s Reply to the PO’s
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`Response points out, inter alia, that Patent Owner Response is non-compliant due
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`to cancelation of original claims 1-4, but does not cite the Second Declaration of
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`Dr. Kursh.
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`Markets-Alert’s Response: Petitioners’ response is argument, which is
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`inappropriate for a listing of facts. Petitioners’ response after “Denied” should be
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`struck. Markets-Alert agrees that it is admitted that the Second Kursh Decl. and
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`New References have not been proffered in support of Petitioners’ Reply.
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`Markets-Alert otherwise denies Petitioners’ response.
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`(2) The Second Kursh Decl. contains testimony in the form of alleged
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`expert opinions at Paragraph Nos. 7, 12-15, 17, 32- 34, 44, and 46-57.
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`Bloomberg Inc. et al Response: Admitted that the Second Kursh
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`Declaration includes statements of fact as well as expert opinions; otherwise
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`denied.
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`Markets-Alert’s Response: Markets-Alert agrees that it is admitted that
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`Second Kursh Decl. contains testimony in the form of alleged expert opinions at
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`Paragraph Nos. 7, 12-15, 17, 32- 34, 44, and 46-57. Markets-Alert otherwise
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`denies Petitioners’ response with respect to the Second Kursh Decl.
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`(3)
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`Petitioners cite previously submitted Exhibit Nos. 1006-1014 and
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`1025-1033 as teaching “methods of technical analysis-based stock market data
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`monitoring and alerting.” Ex. 1043 at 31.
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`Bloomberg Inc. et al Response: Denied. Ex. 1043 is the Second
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`Declaration of Dr. Kursh, the testimony of which is cited in Petitioner’s opposition
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`brief.
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`Markets-Alert’s Response: Petitioners’ response after “Denied” is non-
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`responsive.
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`(4) On March 29, 2013, the Board held that these references (among
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`others to which Petitioners no longer cite) presented grounds for unpatentability
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`redundant to the four grounds instituted. Decision, Paper 18, at 40.
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`Bloomberg Inc. et al Response: Admitted that the Board’s Decision (Paper
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`No. 18) addressed original claims 1-4 of the ’357 Patent (now canceled), otherwise
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`denied. The Board did not issue any ruling with respect to MA’s new Claims 5-8.
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`Markets-Alert’s Response: Markets-Alert agrees that it is admitted that
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`the Board held that these references (among others to which Petitioners no longer
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`cite) presented grounds for unpatentability redundant to the four grounds instituted.
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`Markets-Alert otherwise denies Petitioners’ response with respect to the ‘357
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`Patent claims.
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`(5)
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`Petitioners cite previously submitted Exhibit No. 1004 (Satow) as
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`teaching “server-based, scalable and redundant,” Ex. 1043 at 27, and a “network of
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`computers,” Ex. 1002 at 52.
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`Bloomberg Inc. et al Response: Admitted that Petitioners have submitted
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`Ex. No. 1004 (Satow) in this proceeding, and that Satow discloses elements of the
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`proposed new claims. Otherwise, denied. Ex. 1043 is the Second Declaration of
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`Dr. Kursh, the testimony of which is cited in Petitioner’s opposition brief. Ex.
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`1002 is Dr. Kursh’s first declaration.
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`Markets-Alert’s Response: Markets-Alert agrees that it is admitted that
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`Petitioners cite previously submitted Exhibit No. 1004 (Satow) as teaching “server-
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`based, scalable and redundant” and a “network of computers.” Markets-Alert
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`admits that Ex. 1043 is the Second Declaration of Dr. Kursh and Ex. 1002 is the
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`Dr. Kursh’s first declaration. Markets-Alert otherwise denies Petitioners’ response
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`with respect to Satow as non-responsive or argument.
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`(6)
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`Petitioners cite Satow as an anticipating reference for a “network-
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`based stock trading system” and “technical analysis,” Ex. 1002 at 51-56, and
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`“monitors stock market data in real-time and executes a trade upon satisfaction of
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`the selected criteria, with the user concurrently being notified in real time of trade
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`execution,” Ex. 1043 at 34.
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`Bloomberg Inc. et al Response: Admitted that Petitioners have submitted
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`Ex. No. 1004 (Satow) in this proceeding, and that Satow discloses elements of the
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`proposed new claims. Otherwise, denied. Ex. 1043 is the Second Declaration of
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`Dr. Kursh, the testimony of which is cited in Petitioner’s opposition brief. Ex.
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`1002 is Dr. Kursh’s first declaration.
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`Markets-Alert’s Response: Markets-Alert agrees that it is admitted that
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`Petitioners cite Satow for a “network-based stock trading system,” “technical
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`analysis,” and “monitors stock market data in real-time and executes a trade upon
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`satisfaction of the selected criteria, with the user concurrently being notified in real
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`time of trade execution.” Markets-Alert admits that Ex. 1043 is the Second
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`Declaration of Dr. Kursh and Ex. 1002 is the Dr. Kursh’s first declaration.
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`Markets-Alert otherwise denies Petitioners’ response with respect to Satow as non-
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`responsive or argument.
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`(7)
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`Petitioners cite previously submitted Exhibit No. 1033 (eSignal) as
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`teaching “a server-based, scalable and redundant network.” Ex. 1043 at 40.
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`Bloomberg Inc. et al Response: Admitted that Petitioners have submitted
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`Ex. No. 1033 (eSignal) in this proceeding, and that eSignal discloses elements of
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`the proposed new claims. Otherwise, denied. Ex. 1043 is the Second Declaration
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`of Dr. Kursh, the testimony of which is cited in Petitioner’s opposition brief.
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`Markets-Alert’s Response: Markets-Alert agrees that it is admitted that
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`Petitioners cite previously submitted Exhibit No. 1033 (eSignal) as teaching “a
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`server-based, scalable and redundant network.” Markets-Alert admits that Ex.
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`1043 is the Second Declaration of Dr. Kursh. Markets-Alert otherwise denies
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`Petitioners’ response with respect to eSignal as non-responsive or argument.
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`(8)
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`Petitioners submit New References in Exhibit Nos. 1037 (Chapraty),
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`1038 (Keilani), 1039 (Ambrose), and 1040 (Lim) solely for their alleged teaching
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`of “server-based, scalable and redundant networks.” Ex. 1043 at 41-43.
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`Bloomberg Inc. et al Response: Admitted that Petitioners have submitted
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`Ex. Nos. 1037 (Chapraty), 1038 (Keilani), 1039 (Ambrose), and 1040 (Lim) in this
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`proceeding, and that those reference disclose elements of the proposed new claims.
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`Otherwise, denied. Ex. 1043 is the Second Declaration of Dr. Kursh, the testimony
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`of which is cited in Petitioner’s opposition brief.
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`Markets-Alert’s Response: Markets-Alert agrees that it is admitted that
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`Petitioners submit New References in Exhibit Nos. 1037 (Chapraty), 1038
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`(Keilani), 1039 (Ambrose), and 1040 (Lim) for their alleged teaching of “server-
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`based, scalable and redundant networks.” Markets-Alert admits that Ex. 1043 is
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`the Second Declaration of Dr. Kursh. Markets-Alert otherwise denies Petitioners’
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`response with respect to Chapraty, Keilani, Ambrose and Lim as non-responsive or
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`argument.
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`(9)
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`Petitioners submit New Reference in Exhibit No. 1041 (Toy) for its
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`alleged teachings of a “method and system for monitoring stock market
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`information and notifying users in real time when an event of interest occurs…
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`over a network of computers.” Ex. 1043 at 47.
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`Bloomberg Inc. et al Response: Admitted that Petitioners have submitted
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`Ex. No. 1041 (Toy) in this proceeding, and that Toy discloses elements of the
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`proposed new claims. Otherwise, denied. Ex. 1043 is the Second Declaration of
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`Dr. Kursh, the testimony of which is cited in Petitioner’s opposition brief.
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`Markets-Alert’s Response: Markets-Alert agrees that it is admitted that
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`Petitioners submit New Reference in Exhibit No. 1041 (Toy) for its alleged
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`teachings of a “method and system for monitoring stock market information and
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`notifying users in real time when an event of interest occurs… over a network of
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`computers.” Markets-Alert admits that Ex. 1043 is the Second Declaration of Dr.
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`Kursh. Markets-Alert otherwise denies Petitioners’ response with respect to Toy as
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`non-responsive or argument.
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`CERTIFICATE OF SERVICE
`I certify that a copy of the foregoing PATENT OWNER MARKETS-ALERT
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`REPLY TO PETITIONERS’ OPPOSITION TO MOTION TO EXCLUDE
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`was served on December 10, 2013 to counsel of record for Petitioners via
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`electronic mail:
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`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
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`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
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`/s/Arlyn Alonzo
`Arlyn Alonzo
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