Paper No.
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
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`VOLUSION, INC.
`Petitioner
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`v.
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`VERSATA DEVELOPMENT
`GROUP, INC.
`Patent Owner
`
`AND
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`VERSATA SOFTWARE, INC.
`Real Party-In-Interest
`___________________
`
`Case CBM2013-00017
`Patent 6,834,282
`_____________________
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`PATENT OWNER’S MOTION FOR REHEARING
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`VOLUSION, INC.
`Petitioner
`
`v.
`
`VERSATA DEVELOPMENT
`GROUP, INC.
`Patent Owner
`
`AND
`
`VERSATA SOFTWARE, INC.
`Real Party-In-Interest
`___________________
`
`Case CBM2013-00017
`Patent 6,834,282
`_____________________
`
`
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`PATENT OWNER’S MOTION FOR REHEARING
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`I.
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`Introduction
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
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`Patent Owner, pursuant to an automatic grant of authorization for motions seeking
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`rehearing1, hereby moves for reconsideration of the Order – Conduct of the Proceeding, entered
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`May 12, 2014, Paper No. 42 ( the “May 12 Order”). The Board misapprehended or overlooked
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`multiple issues in reaching its erroneous decision to prematurely dismiss Patent Owner’s Motion to
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`Exclude (Paper No. 39) without substantive consideration on the merits.
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`A.
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`Patent Owner’s Motion to Exclude Was Authorized and Suggested by the Board’s
`Language
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`First, the Board misapprehended or overlooked the fact that its guidance in the order
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`entered April 25, 2014 (Paper No. 36, the “April 25 Order”) suggested that a motion to exclude
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`was the proper way of addressing the issues discussed during the April 22, 2014 teleconference, in
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`which Patent Owner requested authorization to file a motion to strike (the transcript of which was
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`previously filed as Exhibit 2010). As the Board stated: “The Board will determine whether a reply
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`and evidence are outside the scope of a proper reply and evidence when the Board reviews all of
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`the parties’ briefs and prepares the final written decision.” April 25 Order, p. 3 (emphasis added).
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`The Board confirmed this reasoning by quoting the above sentence in full in the May 12 Order.
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`May 12 Order, p. 3. “All of the parties’ briefs”, by its expansive and inclusive nature, must include
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`the motion to exclude evidence, which is expressly provided for by the Scheduling Order in the
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`1 Despite the Board’s contradictory guidance regarding motions seeking rehearing, as discussed
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`below, for the purposes of preserving error, Patent Owner believes the instant motion is authorized
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`and warranted.
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`–1–
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`instant case, consistent with the Office Patent Trial Practice Guide and 37 C.F.R. § 42.64(c). 77
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`Fed. Reg. 48756, 48757 (Aug 14, 2012) (“Once the time for taking discovery in the trial has
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`ended, the parties will be authorized to file motions to exclude evidence believed to be
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`inadmissible.”). Thus, in line with the panel’s reasoning, the Rules, and the Office Patent Trial
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`Practice Guide, Patent Owner’s Motion to Exclude was an authorized brief which included facts and
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`reasoning to assist the panel in determining whether evidence submitted in this proceeding is
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`outside the scope of proper evidence.
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`The Board further noted in the April 25 Order that “the Board will take under consideration
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`any alleged violations in due course with respect to Petitioner’s reply and Exhibit 1017, upon
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`considering the record at the end of the trial.” April 25 Order, p. 3. Again, “the record at the end
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`of the trial” very clearly includes the parties’ motion practice regarding excluding evidence. The
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`Board misapprehended or overlooked this guidance in its erroneous decision to dismiss Patent
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`Owner’s Motion to Exclude without substantive consideration on the merits.
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`B.
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`Patent Owner’s Motion to Exclude Was Consistent with the Board’s Prior Practice
`and Decisions
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`Moreover, the Board misapprehended or overlooked the fact that addressing the scope of
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`reply evidence in a motion to exclude is consistent with the Board’s prior guidance in multiple prior
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`proceedings. For example, in CBM2013-00002, Paper No. 35, the Board wrote, “If [patent owner]
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`believes the evidence at issue is not in the nature of a rebuttal, but rather [petitioner] belatedly
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`presents evidence that should have been submitted in the first instance together with its petition,
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`[patent owner] may seek to exclude the publications [petitioner] submits in its reply, by way of the
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`–2–
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`Motion to Exclude Evidence.” CBM2013-00002, Paper No. 35, Order entered July 18, 2013, p. 2
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`(emphasis added). The panel in CBM2013-00002 did not limit its holding to the particular
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`circumstances of the trial. Moreover, notably, CBM2013-00002 involves the same petitioner and
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`patent owner (Liberty Mutual and Progressive) that the Board and Petitioner mentioned on the May
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`7 call as defining the proper scope of a motion to exclude.
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`Similarly, in IPR2013-00041, Paper No. 44, the Board wrote, “The Board declined to
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`authorize a motion to strike at this time, informing the [patent owner] that the proper vehicle for
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`addressing these issues was as part of a motion to exclude evidence submitted pursuant to 37
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`C.F.R. § 42.64(c).” IPR2013-00041, Paper No. 44, Order entered January 2, 2013, p. 2
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`(emphasis added). Again, the issues addressed in that order were the timeliness and propriety of
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`evidence submitted with a reply, and the panel’s language in that order suggests that filing a
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`motion to exclude, as Patent Owner did in the instant proceeding, was “proper” to address the
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`timeliness issue. CBM2013-00002 and IPR2013-00041 were cited in Patent Owner’s Motion to
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`Exclude, but the May 12 Order suggests that these citations may have been misapprehended or
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`overlooked.
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`Perhaps most significantly, one day after Patent Owner filed its Motion to Exclude, the
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`Board excluded evidence submitted with a petitioner’s reply for being untimely under 37 C.F.R. §
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`42.23(b) and the Office Patent Trial Practice Guide. IPR2013-00047, Paper No. 84, Final Written
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`Decision entered May 1, 2014. Not only did the Board exclude the petitioner’s evidence, but the
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`exclusion was dispositive of the entire proceeding, suggesting that proper consideration of a motion
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`–3–
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`to exclude is indeed necessary to the determination of whether a patent owner should be deprived
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`of a property right. The Board misapprehended or overlooked this clear precedent from other
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`panels in its decision to dismiss Patent Owner’s Motion to Exclude without substantive consideration
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`on the merits.
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`C.
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`The Board’s April 25 Order Did Not Prohibit the Subject Matter of Patent Owner’s
`Motion to Exclude
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`The Board also misapprehended or overlooked the perceived clarity of its April 25 Order.
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`Contrary to the Board’s suggestion, the April 25 Order did not “make clear that, in these
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`proceedings, Patent Owner was not authorized to brief the issue of whether Exhibits 1017 and
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`1018 are beyond the scope of proper evidence submitted with a reply or are supplemental
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`information under 37 C.F.R. § 42.223.” May 12 Order, p. 4. The order to which the Board refers
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`merely states as its conclusion, “Patent Owner’s request to file a motion to strike Exhibit 1017,
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`Exhibit 1018, and the Petitioner’s reply is denied.” April 25 Order, p. 3. The order further states,
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`“It is ORDERED that Patent Owner’s request to file a motion to strike is denied.” Id.
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`The April 25 Order does not say “briefing is not authorized” or “Patent Owner should not
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`address these issues further” or anything of the sort. The April 25 Order’s applicability appears to
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`be limited to the issue of a motion to strike, and there is no indication in the order or otherwise that
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`it is applicable to Patent Owner’s right under the Scheduling Order to file a motion to exclude. The
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`April 25 Order does not even include the words “motion to exclude” at any point.
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`The Board further misapprehended or overlooked other prohibitions that the April 25 Order
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`allegedly “made clear” to Patent Owner. May 12 Order, p. 4. In particular, the Board alleges that
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`–4–
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`“Patent Owner knew that in these proceedings, the panel did not desire nor authorize such
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`briefing.” May 12 Order, p. 4. Certainly, no such prohibition against briefing was contained in the
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`order. It is unrealistic to think that Patent Owner can read the Board’s mind. Moreover, the Board
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`does not need to “authorize” a motion to exclude: it is explicitly provided by the Scheduling Order
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`and may be filed without prior authorization under 37 C.F.R. § 42.64(c).
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`The Board also misapprehended or overlooked what it believes Patent Owner said on the
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`April 22, 2014 conference call. The Board suggests that “counsel for Patent Owner represented
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`that a motion to exclude would not be the proper motion to attempt to remove from the record
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`Exhibits 1017 and 1018.” May 12 Order, p. 4. Though interrupted by Petitioner’s counsel,
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`counsel for Patent Owner suggested that a motion to strike was preferred because, as oral hearing
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`was imminent, striking the exhibits would remove them from the record and remove them from
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`being discussed at oral hearing, while a motion to exclude would not provide the clarity and
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`focusing of issues that a motion to strike would. Exhibit 2010, 15:16-16:4. Counsel for Patent
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`Owner never suggested that the motion to strike was the only way of addressing the issue, merely
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`that it was the preferred method. As Patent Owner’s request was denied, it sought to file a motion
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`to exclude as provided for by the Rules, Scheduling Order and Office Patent Trial Practice Guide.
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`The April 25 Order contained no subject matter prohibition for Patent Owner’s Motion to Exclude,
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`and the Board’s ex post facto imposition of such a prohibition deprives Patent Owner of substantive
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`consideration of its Motion to Exclude with little justification.
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`–5–
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`The Board further misapprehended Patent Owner’s arguments in support of substantive
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`consideration of its Motion to Exclude. Contrary to the Board’s Order, Patent Owner never argued
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`that a motion to exclude “is proper to argue the sufficiency of evidence.” May 12 Order, p. 5.
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`Patent Owner is well-versed in the statute, rules, and Office Patent Trial Practice Guide. A review of
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`the Patent Owner’s Motion to Exclude would reveal that the sufficiency of Petitioner’s evidence is
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`never addressed. The Motion to Exclude is limited to arguing that Petitioner’s Exhibit 1017 and
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`portions of Exhibit 1018 run afoul of the Office’s Rules and procedures, and do not address the
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`weight the evidence should be afforded.
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`Thus, the content of the Motion to Exclude is not in “direct disregard for the guidance
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`provided by the Board for these proceedings.” May 12 Order, p. 5. Nor did Patent Owner make
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`any “contradictory representations” to the Board, as alleged. May 12 Order, p. 5. The Board
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`denied authorization to file a motion to strike, and therefore, Patent Owner did not file a motion to
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`strike. As the Rules governing the motion to exclude do not provide for excluding substantive
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`briefing, only evidence, Patent Owner’s Motion to Exclude did not address Petitioner’s Reply (as it
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`requested on the April 22 call); Patent Owner’s Motion to Exclude only addressed Petitioner’s
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`evidence. In short, the motion to strike that the Board apparently imagines would have been filed
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`(had it been authorized) and the motion to exclude (which: (i) is explicitly provided for in the
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`Scheduling Order, (ii) may be, per 37 C.F.R. § 42.64(c), filed without prior authorization and (iii)
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`was so filed) are not substantively the same motion.
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`–6–
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`Finally, the Board further misapprehended or overlooked the reasons Patent Owner “did not
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`seek rehearing of the Order [denying leave to file a motion to strike].” May 12 Order, p. 4. Earlier
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`in this very proceeding, the Board indicated that rehearing of orders “is not appropriate”: “The
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`Order was not a decision, but guidance provided to the parties. Accordingly, rehearing is not
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`appropriate.” Order – Conduct of the Proceeding, entered January 27, 2014, Paper No. 24.2 The
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`Board cannot, in one instance, use one interpretation of the rehearing rule as a sword to deprive
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`the Patent Owner of its due process, while it earlier uses another interpretation of the rehearing
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`rule as a shield to reduce the number of rehearing requests filed. Thus, the fact that “Patent
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`Owner did not seek rehearing of the Order” is of no moment and should have no bearing on the
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`Board’s reasoning.
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`Arbitrarily dismissing Patent Owner’s Motion to Exclude deprives Patent Owner of its due
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`process as provided for by the rules. The only opportunity a patent owner has to address the
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`evidence submitted with a petitioner reply is in the motion to exclude. Yet, this Board has deprived
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`2 The Office’s comments on the substantive rulemaking are somewhat vague as to whether orders
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`can be reviewed under 37 C.F.R. § 42.71(d). For example, § 42.71(d) provides for rehearing of
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`“decisions”, and the Office merely notes that Rule 42.71(b) “provides for interlocutory decisions”
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`of petitions and motions. 77 Fed. Reg. 48624. The April 25 Order did not “decide” anything, nor
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`was it a “decision on motions,” rather, it “ordered” that Patent Owner was not permitted to file a
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`motion to strike. Accordingly, Patent Owner, mindful of the Board’s prior guidance, did not file a
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`rehearing request. For some reason, the May 12 Order maligns Patent Owner for its obedience.
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`–7–
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`the Patent Owner of that very limited right, without any substantive, written discussion of this very
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`weighty issue. The Board has assured Patent Owner that it is very capable of discerning issues of
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`timeliness and propriety of evidence. While Patent Owner truly seeks the Board’s discernment,
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`consistent with due process guarantees, that discernment should be informed by facts and issues
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`raised in Patent Owner’s substantive motion.
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`Moreover, dismissing Patent Owner’s Motion to Exclude merely because the panel “did not
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`want briefing” or “did not desire…such briefing” sets a dangerous precedent. May 12 Order, p. 4.
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`If a patent owner response contains arguments in support of claims that a given panel of the Board
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`does not “desire,” will that panel summarily dismiss the patent owner’s response without
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`consideration? Desirability of arguments is not mentioned in the statute, rules, or Trial Guide as
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`grounds for dismissal of a paper, but the May 12 Order would understandably lead a patent owner
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`to believe the Board decides substantive issues on this basis.
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`Finally, it is particularly notable that the Petitioner had, in the conference call that preceded
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`the dismissal, merely requested authorization to file a motion to expunge Patent Owner’s Motion to
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`Exclude. Instead of ordering briefing, the Board sua sponte dismissed Patent Owner’s Motion to
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`Exclude. Had the Board authorized briefing, perhaps the issues would have been fully analyzed,
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`and the Board could have come to the correct conclusion that Patent Owner’s Motion to Exclude
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`was authorized, proper, and should be considered on the merits. Indeed, ordering briefing would
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`appear to be consistent with 37 C.F.R. § 42.20: “Relief…must be requested in the form of a
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`motion.” The Rules do not provide for an oral motion, and briefing would also be consistent with
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`–8–
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`37 C.F.R. § 1.2: “[a]ll business with the Patent and Trademark Office should be transacted in
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`writing.” But instead of following the proper procedures, and instead of correctly appreciating the
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`impact of its actions, the Board chose to prematurely cut off Patent Owner’s rights by dismissing
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`the Motion to Exclude without substantive consideration on the merits.
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`II.
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`Conclusion
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`For at least the reasons set forth herein, Patent Owner respectfully submits that the May 12
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`Order should be withdrawn, and Patent Owner’s Motion to Exclude should be considered on the
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`Respectfully submitted,
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`/David W. OBrien/
`David W. O’Brien
`Registration No. 40,107
`HAYNES AND BOONE, LLP
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`–9–
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`merits.
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`Dated: 26-May-2014
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`Patent Owner’s Motion for Rehearing
`CBM2013-00017 (Patent 6,834,282)
`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`VOLUSION, INC.
`Petitioner
`v.
`VERSATA DEVELOPMENT
`GROUP, INC.
`Patent Owner
`AND
`VERSATA SOFTWARE, INC.
`Real Party-In-Interest
`_________________
`Case CBM2013-00017
`Patent 6,834,282
`Title: LOGICAL AND CONSTRAINT BASED BROWSE HIERARCHY WITH PROPAGATION FEATURES
`_____________________
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`CERTIFICATE OF SERVICE
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`The undersigned certifies, in accordance with 37 C.F.R. § 42.205, that service was made on
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`the Petitioner as detailed below.
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`Date of service May 26, 2014
`Manner of service by email upon record and non-record counsel listed below
`Documents served Patent Owner’s Motion for Rehearing
`Supplemental Update to Patent Owner’s Mandatory Notices
`Persons served Keith E. Broyles (keith.broyles@alston.com)
`David Frist (david.frist@alston.com)
`Pamela Councill (pamela.councill@alston.com)
`Alston & Bird LLP
`One Atlantic Center
`1201 West Peachtree Street
`Atlanta, GA 30309-3424
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`/David W. OBrien/
`David W. O’Brien
`Registration No. 40,107
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`–10–
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