`EXHIBIT 2170
`CBM2013-00020 (APPLE v. SIGHTSOUND)
`PAGE 000001
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`Conference Call
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`Washington, DC
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`March 31, 2014
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`Page 1
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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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` ---------------
`
` APPLE, INC.,
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` Petitioner,
`
` v.
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` PATENT OF SIGHTSOUND TECHNOLOGIES, LLC,
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` Patent Owner.
`
` ---------------
`
` CASE CBM2013-00020 and 23
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` Monday, March 31, 2014
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` 2:02 p.m. to 2:44 p.m.
`
`BEFORE THE HONORABLE JUSTIN T. ARBES and THE
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`HONORABLE MICHAEL P. TIERNEY
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`Alderson Reporting Company
`1-800-FOR-DEPO
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`
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`PAGE 000002
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`Conference Call
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`Washington, DC
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`March 31, 2014
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`Page 2
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` A P P E A R A N C E S
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` (As introduced on teleconference)
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` On Behalf of the Patent Owner, SightSound
`
` Technologies, LLC:
`
` DAVID MARSH, ESQUIRE
`
` KRISTAN L. LANSBERY, ESQUIRE
`
` Arnold & Porter
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` 555 Twelfth Street Northwest
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` Washington, DC 20004
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` (202) 942-5068
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` On Behalf of the Petitioner, Apple, Inc.:
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` J. STEVEN BAUGHMAN, ESQUIRE
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` CHING-LEE FUKUDA, ESQUIRE
`
` Ropes & Gray
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` Three Embarcadero Center
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` San Francisco, California 94111-4006
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` (415) 315-6300
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` - - -
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`Alderson Reporting Company
`1-800-FOR-DEPO
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`PAGE 000003
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`Washington, DC
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`March 31, 2014
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`Page 3
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` P R O C E E D I N G S
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` JUDGE ARBES: Hello, everyone. This
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` Judge Arbes for the Patent Trial and Appeal
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` Board. With me is Judge Tierney. This is a
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` conference call in the case of CBM2013 in 20 and
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` 23. Do we have counsel for the petitioner on
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` the line?
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` MR. BAUGHMAN: Yes, Your Honor. Steve
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` Baughman from Ropes & Gray, and with me is
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` Ching-Lee Fukuda.
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` MS. FUKUDA: Hello, Your Honor.
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` JUDGE ARBES: Okay. And counsel for the
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` patent owner?
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` MR. MARSH: Yes, Your Honor. We have
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` David Marsh for the patentee. I'm here with
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` William Louden, who will just be sitting in on
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` the call.
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` JUDGE ARBES: Okay. And I understand
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` that we have a court reporter on the line today.
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` THE REPORTER: Yes, sir. Rebecca
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` Stonerock.
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` JUDGE ARBES: Great. Thank you.
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`Alderson Reporting Company
`1-800-FOR-DEPO
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`
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`PAGE 000004
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`Washington, DC
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`March 31, 2014
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`Page 4
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` The conference call was requested by
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` counsel for the patent owner. We received an
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` e-mail on March 24 with a couple of issues, one
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` being the date in the scheduling order and
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` proposing modified dates, and then two, issues
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` with the petitioner's reply brief on each case.
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` So regarding the first issue, I believe
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` that the Board paralegal stated that we would --
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` that the proposed modified dates for the
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` scheduling order are fine, and so we will be
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` entering a revised scheduling order in both
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` proceedings with the date that the properties
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` have proposed recognizing that the oral hearing
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` will not be changed on the date. So is there
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` anything else to discuss regarding that or any
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` other issues with scheduling that the parties
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` would like to raise?
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` MR. MARSH: Yes, Your Honor. We would
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` like to discuss the observations on
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` cross-examination.
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` JUDGE ARBES: Okay. Sure.
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` MR. MARSH: We -- this is David Marsh on
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`Alderson Reporting Company
`1-800-FOR-DEPO
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`
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`PAGE 000005
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`Washington, DC
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`March 31, 2014
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`Page 5
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` behalf of SightSound. We would like to propose
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` filing those and we would like to propose 15
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` pages for those because we have five required
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` declarants, four of which are brand new to the
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` proceedings, and there's a significant amount of
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` evidence that were discussed with respect to the
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` other declarants issues we raised and regard
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` that we would require 15 pages to encompass the
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` large number of declarants and also the new
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` evidence, which counsel for petitioner disagrees
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` that it's new evidence. So just to lay that
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` out.
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` JUDGE ARBES: Okay. So it would be the
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` patent owner filing a motion for observation on
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` cross-exam of the declarants that the petitioner
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` has put forth with the reply. Do I understand
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` that right?
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` MR. MARSH: You understand that
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` correctly, Your Honor.
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` JUDGE ARBES: Okay. And the date for
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` that would be April 11?
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` MR. MARSH: You're correct, Your Honor.
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`Alderson Reporting Company
`1-800-FOR-DEPO
`
`
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`PAGE 000006
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`Washington, DC
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`March 31, 2014
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`Page 6
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` JUDGE ARBES: Okay. Any objection to
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` that from the petitioner?
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` MR. BAUGHMAN: Your Honor, we don't
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` object to the date. We hadn't conferred about
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` pages. I will say for petitioner I guess 15
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` seems like a lot of pages. We have three fact
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` witnesses, two of which are going to have
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` very -- as apparent from their declarations,
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` very short depositions and we think that that
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` seems like more pages than might be merited for
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` this.
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` JUDGE ARBES: Okay. Well, the standard
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` for motions is 15 pages. We'll authorize for
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` the patent owner to file one motion for
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` observation on cross-exam of all of the
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` witnesses limited to 15 pages total. And then,
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` petitioner, you have an opportunity to file a
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` response to that. Any other issues to discuss
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` for that?
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` MR. BAUGHMAN: No, Your Honor.
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` MR. MARSH: Just to confirm, Your Honor,
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` the response to that will be on the 18th?
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`Alderson Reporting Company
`1-800-FOR-DEPO
`
`
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`PAGE 000007
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`Conference Call
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`Washington, DC
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`March 31, 2014
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`Page 7
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` JUDGE ARBES: Yes, that was our
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` understanding.
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` MR. MARSH: Thank you, Your Honor.
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` JUDGE ARBES: Okay. Moving on to the
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` other issues that the patent owner raised in
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` their e-mail I believe had to do with
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` petitioner's reply brief. So counsel for the
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` patent owner, would you like to explain what
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` you're requesting and the basis for the request?
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` MR. MARSH: Yes, Your Honor. We're
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` requesting the Court's guidance on the -- how to
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` handle the additional evidence with respect to
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` particularly obviousness that was filed with the
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` reply brief. The new evidence on obviousness,
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` in our view, includes materials in the brief,
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` materials in the declarants and also specific
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` exhibits.
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` And also, Your Honors, we would desire
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` the Court's guidance on that the declarants also
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` have improper arguments in the declarations
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` which should have been in the brief and were not
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` in the brief because of the page limit.
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`Alderson Reporting Company
`1-800-FOR-DEPO
`
`
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`PAGE 000008
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`Conference Call
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`Washington, DC
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`March 31, 2014
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`Page 8
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` JUDGE ARBES: Okay. Well, let's take the
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` first issue first. Can you give us an example
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` of what -- we have the petitioner's reply in
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` CBM2013-00020 in front of us. Can you give us
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` an example of what you believe to be the
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` improper new argument in that reply?
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` MR. MARSH: Yes, Your Honor. Here Apple
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` cites to the -- here on page 9 of the brief
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` CBM 23 page 8 to 9, page 9 of CBM 20. They
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` cite, "During reexamination as cited, 1986
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` reference depicted the ability to purchase and
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` receive -- at home over phone lines, Exhibit
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` 4256, paragraph 52, Exhibit 4103." Here Apple
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` cites to the Kenswill declaration in which it's
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` citing to the prosecution history which is
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` actually citing to the District Court order, and
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` the denied summary judgment on grounds of
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` obviousness. The order was submitted during the
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` reexam, which is why it's part of the file
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` history.
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` If Apple wanted to rely on the quote that
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` it relies on within that, it should have done
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`Alderson Reporting Company
`1-800-FOR-DEPO
`
`
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`PAGE 000009
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`Conference Call
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`Washington, DC
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`March 31, 2014
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`Page 9
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` that in its original motion. But they're doing
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` it for the first time here, Your Honor.
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` JUDGE ARBES: Okay. You mean they should
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` have allowed it in their initial petition?
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` MR. MARSH: Correct, Your Honor.
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` JUDGE ARBES: Okay. Can we hear from the
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` petitioner on that?
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` MR. BAUGHMAN: Your Honor, I apologize.
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` This is Steve Baughman for the petitioner. I
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` actually wasn't able to entirely follow that
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` example, which we hadn't heard before. This
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` wasn't one of the two examples we discussed in
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` advance of the call.
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` JUDGE ARBES: Well, the patent owner
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` seems to be saying that this citation to the
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` prosecution history was not made in your initial
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` petition and is not responsive to any argument
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` that they made in their response. So do you
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` have a response to that?
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` MR. BAUGHMAN: Your Honor, I'm sorry, I'm
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` just having trouble locating the pages that
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` we're talking about in the reply.
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`Alderson Reporting Company
`1-800-FOR-DEPO
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`
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`PAGE 000010
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`Washington, DC
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`March 31, 2014
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`Page 10
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` JUDGE ARBES: We have page 9 of the reply
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` in the 20 case -- correct me if I'm wrong patent
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` owner, but I believe you're referring to the
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` second complete sentence beginning, "During
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` reexamination."
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` MR. MARSH: You're correct, Your Honor.
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` MR. BAUGHMAN: Your Honor, I apologize.
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` I have the 23 case up. Give me one moment,
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` please.
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` JUDGE ARBES: Sure. No problem.
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` MR. BAUGHMAN: The statement on page 9 --
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` sorry, I now have it open, Your Honor. I
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` apologize, I -- one more time, please --
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` JUDGE ARBES: Sure.
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` MR. BAUGHMAN: -- counsel for petitioner
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` or Your Honor.
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` JUDGE ARBES: I believe that the patent
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` owner was referring to the sentence beginning,
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` "During reexamination as cited, 1986 reference,"
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` and was arguing that that is improper new
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` argument and not responsive to what they put in
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` their response.
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`Alderson Reporting Company
`1-800-FOR-DEPO
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`
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`PAGE 000011
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`Washington, DC
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`March 31, 2014
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`Page 11
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` MR. BAUGHMAN: Oh, yes, Your Honor.
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` Generally speaking, we were responding to their
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` assertion that the ability to purchase and
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` receive digital media at home was -- was not
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` known at the time. We're responding with a
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` variety of examples and we're responding to
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` their assertions regarding what a person of
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` skill would or would not have understood.
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` They're arguing here that, among other
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` things, it wasn't known to do certain things
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` with credit cards, it wasn't known to purchase
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` certain things over telecommunication lines, and
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` we're responding to those assertions.
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` JUDGE ARBES: Okay. And this 1986
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` reference is cited in support of that, I take
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` it.
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` MR. BAUGHMAN: Yes, Your Honor. And I
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` apologize again, this isn't an example we had
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` discussed in advance so I haven't pulled all the
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` documents in front of me, but we're not trying
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` to present any new ground of invalidity here.
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` We're not suggesting any new combination of
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`PAGE 000012
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`Washington, DC
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`March 31, 2014
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`Page 12
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` references other than the ground that the Board
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` has already instituted. We're simply trying to
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` combat the assertion that a person of skill
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` would not have understood what we have asserted
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` in the petition or that a person of ordinary
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` skill would not have been able to do what the
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` Board found in instituting trial in this matter.
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` JUDGE ARBES: Okay. Would the patent
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` owner like to respond?
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` MR. MARSH: Your Honors, we're not
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` asserting that it's a new ground of rejection,
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` we're asserting that it's a new basis of
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` evidence to support that ground that wasn't
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` raised before, Your Honor.
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` JUDGE ARBES: Okay. Well, Counsel, we
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` have -- we have held in other cases before that
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` the Board is able to determine what is new
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` argument versus what is properly responsive to
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` another party's filings at the time it reviews
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` all of the evidence in a case at the very end
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` and prepares a final written decision when we
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` have the full record before us and are able to
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`Alderson Reporting Company
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`PAGE 000013
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`March 31, 2014
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`Page 13
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` look at everything and figure out what is new
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` argument and what is not, and that that's the
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` time that the Board customarily makes that
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` determination.
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` So that -- recognizing that that is the
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` usual procedure in the absence of a special
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` circumstance, why do you believe that there
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` would be a special circumstance here or that it
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` would -- it would be appropriate to take further
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` action such as striking this or any other action
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` at this time?
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` MR. MARSH: Your Honor, we very much
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` appreciate the skills set of the court and the
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` ability of the court to handle the large volume
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` of information in front of it. The issue that
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` concerns us here is the extensive nature of this
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` and the ability through a very large and
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` extensive record to flag all of the issues that
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` this has occurred during the reply brief. The
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` reply brief was 15 pages, the associated
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` exhibits was three binders worth.
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` So, Your Honor, the burden on the Board
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`PAGE 000014
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`Page 14
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` would be fairly extensive to cross-reference all
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` of those points. Well within, of course, your
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` skills set, but we would take the Board's
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` guidance as to how to best point out this
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` occurrence as it is not limited to just the
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` brief.
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` JUDGE ARBES: Okay. The Panel will
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` confer briefly. We'll go on mute and be back in
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` just a minute.
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` MR. MARSH: Your Honor, before you
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` confer, could I add one more issue? The --
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` during the deposition of Mr. Kelly, the deponent
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` stated that the obviousness arguments were
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` largely limited to paragraph 57 -- paragraph 47,
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` I apologize, of Mr. Kelly's declaration and it
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` said, "Did you" -- my question was, "Did you
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` evaluate the obviousness of claims in either the
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` '573 or the '440 patent with respect to the
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` Compusonic art?" And the response was, "I did."
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` And then the answer was, "Well, I set forth the
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` results of it in paragraph 47 of Exhibit 1132."
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` So I wanted to flag where the petitioner
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`PAGE 000015
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`Page 15
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` regarded the obviousness response or original
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` filing to be, Your Honors.
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` JUDGE ARBES: Okay. And how does that
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` relate here? What relief are you seeking for
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` that?
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` MR. MARSH: It flags the extent the
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` petitioner put forth the obviousness arguments
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` in the original petition, Your Honor.
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` MR. BAUGHMAN: Your Honor, if I might
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` respond for petitioner.
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` JUDGE ARBES: Sure.
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` MR. BAUGHMAN: Steve Baughman, Your
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` Honor. First, the issue as I understand it here
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` is not the nature of the original arguments, but
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` whether the responsive material placed in
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` rebuttal in our reply is appropriate rebuttal.
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` And certainly we are responding to arguments
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` presented by patent owner in these papers. And
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` regarding volume, I think the Board will
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` certainly be able to assess what it does and
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` does not need to review of documents in their
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` entirety in assessing the reply brief we
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` provided. We're not asking the Board
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` independently to comb through exhibits.
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` We've made an argument that we believe is
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` entirely responsive to what the patent owner has
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` asserted in its response and we believe the
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` Board is certainly able -- but obviously the
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` Board will determine for itself -- certainly
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` able to assess the argument being made and use
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` the evidence appropriately.
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` JUDGE ARBES: Okay. The Panel will
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` confer briefly. We'll go on mute and be back
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` shortly.
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` (Short recess taken.)
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` JUDGE ARBES: Okay. The Panel has had a
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` chance to confer. What we're going to do is
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` take the matter under advisement. We'll issue
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` an order shortly after the call today on this
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` and a number of other issues and we'll include
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` that within the order.
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` I believe the Panel has one other issue
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` to discuss, but before we do, patent owner, I
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` believe you raised an issue regarding the
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` witness declarations. Is there anything that
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` you would like to discuss for that?
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` MR. MARSH: Your Honor, the witness
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` declarations -- and to give an example, the
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` Kenswill declaration has extensive attorney
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` argument or what's basically argument with
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` respect to -- that's more appropriate in a brief
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` than it is in a fact or expert witness. The
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` paragraphs include paragraphs 34 to 40, 47,
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` 48 --
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` JUDGE ARBES: Counsel, do you have the
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` exhibit number?
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` MR. MARSH: Sure. My apologies. Let
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` me -- Exhibit 4256, Your Honor.
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` JUDGE ARBES: Okay. And this is a
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` declaration from someone regarding the alleged
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` commercial success or lack thereof argument?
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` MR. MARSH: Correct, Your Honor.
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` JUDGE ARBES: Okay. And what relief are
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` you seeking for this?
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` MR. MARSH: We're looking for guidance
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` from the Board, Your Honor. There's extensive
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` what we would regard as argument here that is
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` not declaratory evidence as you mentioned in
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` the -- with respect to the evidence issues we
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` raised before, that the -- had a sophisticated
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` Board, so we're looking for what guidance from
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` you as to how we should deal with this under
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` these circumstances.
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` JUDGE ARBES: Okay. Well, this is --
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` obviously the arguments that a party puts
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` forward in its briefing, i.e. the petition or
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` the reply, are what are considered. That is the
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` position of a party. The function of the expert
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` declaration is to provide support for that, but
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` the argument does need -- any argument to be
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` made needs to be made in the briefing.
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` The expert declaration is not a
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` substitute for the briefing. We don't permit
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` incorporation by reference. So that is
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` something that the Board is able to determine on
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` its own. We have done that for petitions.
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` We're able to do that for replies as well. So I
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` think that's -- that's something that the Panel
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` can determine when it reviews all of the
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` evidence in this case.
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` MR. MARSH: Your Honor, would it be
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` helpful for us to submit a list of the
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` paragraphs at issue here, Your Honor, or would
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` that not be helpful?
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` JUDGE ARBES: And this would be
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` paragraphs that you believe are not -- that make
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` arguments that are not made in the reply?
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` MR. MARSH: You're correct, Your Honor.
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` JUDGE ARBES: Okay. Let me do this,
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` then. The Panel will consider that matter
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` further as well and address that in the order
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` after the call today.
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` MR. BAUGHMAN: Your Honor, if petitioner
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` could make a brief statement.
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` JUDGE ARBES: Sure.
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` MR. BAUGHMAN: I just want to note, Your
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` Honor, obviously we disagree about whether these
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` are appropriate, and I guess we would ask if the
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` Board is considering patent owner's request that
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` we get an opportunity to respond just as to the
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` petition -- the paragraphs that were mentioned.
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` Because there's a transcript here today, I want
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` to note that those are discussing a number of
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` documents that are also addressed in the reply
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` brief and quoting and examining those that are
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` also again addressed in our argument in the
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` reply. So we'd request an opportunity to
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` respond if patent owner is given an opportunity
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` to make assertions.
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` JUDGE ARBES: Okay. The Panel will
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` consider that further and address it as an
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` order. I think we understand both parties'
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` position.
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` Any other issues that the parties would
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` like to raise regarding the reply briefs or
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` evidence submitted with them?
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` MR. MARSH: Your Honor, we have discussed
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` with counsel potentially inconsistent documents
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` and have requested a TIGR infringement report
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` that was filed by SightSounds' expert in the --
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` in the District Court litigation as being
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` inconsistent with the positions Apple has taken
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`PAGE 000021
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`March 31, 2014
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`Page 21
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` in its reply papers, I believe.
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` And Mr. Baughman will do, I'm sure, an
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` excellent job of characterizing Apple's
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` position, but it's Apple's position that the
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` claims are not co-extensive with the iTunes
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` ITMS, and it's our position that they are. And,
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` for instance, Dr. Kelly has made a number of
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` positions in its -- in his declaration that
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` iTunes does not infringe, i.e., is not
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` co-extensive with the claims of the patent. We
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` believe that the TIGR infringement report, which
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` is in possession of Apple, is inconsistent with
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` that and have requested its production.
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` JUDGE ARBES: Okay. Counsel, refresh our
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` recollection. I believe that this -- this issue
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` with the expert report came up previously in
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` this case, that I take it the parties were not
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` able to resolve the issue at that time.
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` MR. MARSH: You're correct, Your Honor.
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` We requested discovery on the -- and
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` specifically called out the TIGR infringement
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` report as a -- as a specific paper with its
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`PAGE 000022
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`March 31, 2014
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` exhibits that we requested discovery on, in
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` part, Your Honor, because we believed this might
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` be a position that Apple would take. Apple's
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` position was -- and you denied the discovery,
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` and Apple's position is, I believe, that it
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` isn't inconsistent with the positions they're
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` taking.
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` JUDGE ARBES: Okay. Can we hear from the
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` petitioner?
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` MR. BAUGHMAN: Yes, Your Honor. So I
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` guess the way that we would start by framing the
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` issue that we have made specific statements in
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` our reply brief about why we are not practicing
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` the claimed invention. I'm not sure I would
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` agree with counsel's characterization of what it
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` means to be co-extensive with, but as far as
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` practicing the limitations of the claims, we've
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` not made a blanket assertion that we don't
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` infringe -- that's not the issue presented to
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` the Board -- but rather that we are not
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` practicing particular elements. And we have,
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` upon the inquiry from patent owner's counsel,
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`PAGE 000023
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`March 31, 2014
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`Page 23
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` considered their request and we do not believe
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` we have any inconsistent information with the
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` statements we've made in our reply brief.
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` And I guess I would just -- I know the
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` Board's well aware of it, but we note the Garmin
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` versus Cuozzo case, IPR2012-1, paper 26 at 4,
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` which talks about the rule being directed to the
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` specific information known to the responding
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` party to be inconsistent with the position
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` advanced by the party not broadly directed to
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` any subject area in general.
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` And so the issue here is not infringement
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` or noninfringement. If there's a broad
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` assertion that somebody infringes -- obviously
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` there's a litigation here -- that's not
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` inconsistent with our position that certain
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` elements are not practiced as set forth in our
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` papers. And so we don't believe there is
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` inconsistent information to be provided here.
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` JUDGE ARBES: Okay. Well, Counsel, I
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` believe that our previous order addressed this
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` within the context of a motion for additional
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`PAGE 000024
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`March 31, 2014
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`Page 24
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` discovery. Seems that the patent owner here is
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` arguing that this is -- that the assertions that
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` are allegedly made in this expert report are
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` inconsistent with assertions that Apple is
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` making now.
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` For instance, if Apple is arguing now
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` that it does not practice the invention because
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` it doesn't practice element X of the claims
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` whereas we have this expert report that does say
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` that Apple practices X element of the claims,
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` that seems to be their argument.
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` MR. BAUGHMAN: Your Honor, our position
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` is that we've said we don't practice X element
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` because of fact 1, and there is no position
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` from -- we're aware of that's inconsistent with
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` fact 1.
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` JUDGE ARBES: Okay. The Panel will
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` confer just briefly and go on mute and be back
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` in a minute.
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` (Short recess taken.)
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` JUDGE TIERNEY: This is Judge Tierney. I
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` just had a couple questions and I wanted to sort
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`PAGE 000025
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`March 31, 2014
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`Page 25
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` of direct to Apple. Regarding the TIGR report,
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` what prejudice is there to giving a copy of that
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` report to SightSound's counsel in this case?
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` MR. BAUGHMAN: Yes, Your Honor. Steve
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` Baughman for petitioner. The report is
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` predicated in large part on confidential and
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` highly confidential information of Apple. The
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` request that was made to us was to produce the
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` report and all of the attached exhibits, which
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` include, as I understand it, source code and
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` other material that actually leads to a
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` prosecution bar and was produced with the
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` understanding that it would not be made
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` available to anyone who was involved in
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` activities involving prosecution or the shaping
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` of claims or arguments about the claims owned by
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` SightSound.
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` JUDGE TIERNEY: Yes, I can remember the
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` conversation we've had on this before.
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` MR. BAUGHMAN: Yes, Your Honor.
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` JUDGE TIERNEY: The report itself,
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` though, without the attachments, without the
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`PAGE 000026
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`March 31, 2014
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`Page 26
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` source code, if we merely attach the report, is
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` there a problem with just the report being given
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` over to the SightSound counsel, or would the
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` prejudice be there?
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` MR. BAUGHMAN: Well, Your Honor, the
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` report, as I understand it -- and I don't have
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` it in front of me, but it does quote extensively
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` from those documents. In other words, it
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` distills a lot of that confidential information.
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` The report itself is highly confidential,
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` not just the attachments. So it's not as though
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` it's a redacted sort of form of document that
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` attaches the confidential material. That
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` confidential material is woven all through the
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` report, which addresses a huge array of issues
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` other than the few pinpoint questions that are
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` before the Board on the reply, none of which
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` depended on confidential information.
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` JUDGE TIERNEY: You just mentioned
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` another alternative, which is a redacted copy.
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` Is there a way that it could be redacted such
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` that you give them at least an inkling of what
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`PAGE 000027
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`March 31, 2014
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`Page 27
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` the ex report is going toward?
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` MR. BAUGHMAN: Your Honor, I haven't
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` looked at that question. We can -- we can
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` consider that and discuss with counsel for
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` patent owner whether the particular, I suppose,
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` limitations that we're talking about, whether
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` it's possible to redact that portion of the
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` brief so as not to include any confidential
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` information. I haven't assessed that question.
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` We haven't been asked that by patent owner.
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` JUDGE TIERNEY: This is Judge Tierney.
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` This is one member of the Panel. I would
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` appreciate if you looked into that issue.
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` Originally we denied the request because we are
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` sensitive as to giving out source code and other
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` highly confidential business information here
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` given that there wasn't the showing of a need
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` balanced out against prejudice. If we could
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` somehow give at least a redacted copy over,
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` though, that would alleviate the prejudice to
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` you, to Apple, and I think that would go a long
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` way to getting this issue resolved.
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`Alderson Reporting Company
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`PAGE 000028
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`March 31, 2014
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`Page 28
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` MR. BAUGHMAN: Your Honor, we can -- we
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` can certainly take a look at that and then see
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` what we can reach agreement