Case CBM2013-00023
`Patent 5,966,440
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________
`
`APPLE INC.
`
`Petitioner
`
`v.
`
`SIGHTSOUND TECHNOLOGIES, LLC
`Patent Owner
`______________
`
`Case CBM2013-00023
`Patent 5,966,440
`______________
`
`Before the Honorable MICHAEL P. TIERNEY, JUSTIN T. ARBES, and
`GEORGIANNA W. BRADEN,
`Administrative Patent Judges.
`
`
`
`PETITIONER APPLE INC.’S REPLY IN SUPPORT OF ITS
`MOTION TO EXCLUDE UNDER 37 C.F.R. §§ 42.62 AND 42.64
`
`FILED UNDER SEAL
`
`
`
`ROPES & GRAY
`Prudential Tower
`800 Boylston Street
`Boston, Massachusetts 02199-3600
`(202) 508-4606 (Telephone)
`(617) 235-9492 (Fax)
`
`
`
`
`By: Attorneys/Agents For Petitioner
`
`J. Steven Baughman, Lead Counsel
`Registration No. 47,414
`Ching-Lee Fukuda, Back-up Counsel
`Registration No. 44,334
`James R. Batchelder, Back-up Counsel
`Pro Hac Vice Granted
`
`
`
`
`Patent 5,966,440
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________
`
`APPLE INC.
`
`Petitioner
`
`v.
`
`SIGHTSOUND TECHNOLOGIES, LLC
`Patent Owner
`______________
`
`Case CBM2013-00023
`Patent 5,966,440
`______________
`
`Before the Honorable MICHAEL P. TIERNEY, JUSTIN T. ARBES, and
`GEORGIANNA W. BRADEN,
`Administrative Patent Judges.
`
`
`
`PETITIONER APPLE INC.’S REPLY IN SUPPORT OF ITS
`MOTION TO EXCLUDE UNDER 37 C.F.R. §§ 42.62 AND 42.64
`
`FILED UNDER SEAL
`
`
`
`ROPES & GRAY
`Prudential Tower
`800 Boylston Street
`Boston, Massachusetts 02199-3600
`(202) 508-4606 (Telephone)
`(617) 235-9492 (Fax)
`
`
`
`
`By: Attorneys/Agents For Petitioner
`
`J. Steven Baughman, Lead Counsel
`Registration No. 47,414
`Ching-Lee Fukuda, Back-up Counsel
`Registration No. 44,334
`James R. Batchelder, Back-up Counsel
`Pro Hac Vice Granted
`
`
`
`
`
`Case CBM2013-00023
`Patent 5,966,440
`
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`PO Does Not Dispute That Mr. Snell Failed To Investigate Facts
`Unquestionably Relevant to Mr. Snell’s User Interfaces Opinion ......................... 1
`
`PO Offers No Support for Mr. Snell’s “Co-Extensive” Opinion,
`and Misapprehends the Cited Federal Circuit Caselaw ........................................... 1
`
`III. PO’s Position That Content is “Irrelevant” is Untenable and
`Contradicted by PO’s Own Documents .................................................................... 3
`
`IV. No Basis for Opinions Based On “Second Party” Misconstruction ..................... 4
`
`V. No Basis For Opinions Based On Disagreement With The
`Inventor’s Statements Regarding The Meaning of Electronic
`Sale/Purchase ................................................................................................................. 4
`
`
`
`i
`
`
`
`Case CBM2013-00023
`Patent 5,966,440
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`
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`TABLE OF ABBREVIATIONS
`
`PO
`
`iTMS
`
`Pet. Rep.
`
`Mot.
`
`Patent Owner
`
`iTunes Store / iTunes Music Store
`
`CBM2013-00023, paper 49.
`
`CBM2013-00023, paper 67.
`
`Opp.
`
`Note: All emphasis herein added unless otherwise stated.
`
`CBM2013-00023, paper 75.
`
`ii
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`
`
`I.
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`Case CBM2013-00023
`Patent 5,966,440
`
`
`PO Does Not Dispute That Mr. Snell Failed To Investigate Facts Un-
`questionably Relevant to Mr. Snell’s User Interfaces Opinion
`
`PO does not dispute that Mr. Snell did nothing to investigate the features of the
`
`SightSound.com electronic store user interface other than look at old screen shots,
`
`had not looked even at those in connection with these proceedings, and could not
`
`discern what happened when a user clicked on the buttons shown. See, e.g., EX4366
`
`126:9-128:11, 177:4-178:24; EXS4368-69 (Dep. Exs. 9-10); Mot. 6. PO also does not
`
`dispute that Mr. Snell did not know whether SightSound.com had features comparable
`
`to any of the many iTMS features not accused, or that he admitted he had no basis for
`
`opining as to whether any of those features was important to consumers, and thus
`
`commercial success. EX4366 163:11-186:3, 196:5-207:22, 208:19-212:17, 213:14-
`
`214:14; EX4370-72 (Depo. Exs. 11-13); Mot. 6-7. PO’s lack of dispute is particularly
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`glaring given PO’s burden to prove nexus. See, e.g., Pet. Rep. 10-11. Given his lack of
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`factual basis and lack of any commercial expertise,1 Mr. Snell’s opinion that the user
`
`interfaces of SightSound.com and the iTMS are only insignificantly different—directly
`
`contrary to undisputed facts he never investigated or considered—should be excluded.
`
`II.
`
`PO Offers No Support for Mr. Snell’s “Co-Extensive” Opinion, and Mis-
`apprehends the Cited Federal Circuit Caselaw
`
`
`1 See, e.g., IPR2013-00004, Paper 53; Xpertuniverse, Inc. v. Cisco Sys., Inc., 2013 U.S. Dist.
`
`LEXIS 31327, *11 (D. Del. Mar. 7, 2013) (excluding opinions of technical expert on,
`
`e.g., commercial success for lack of proper qualifications).
`
`1
`
`
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`Case CBM2013-00023
`Patent 5,966,440
`PO’s response ignores the critical point that Mr. Snell did not understand the
`
`meaning of “co-extensive”—rendering baseless his opinions on that issue. Though
`
`repeatedly asked, Mr. Snell could not answer whether, “If a given product has a variety of
`
`features that are not claimed in the given patent claim but the product practices the
`
`patent claim, is that product co-extensive with that claim?” EX4366 35:5-39:11. PO’s
`
`only explanation for Mr. Snell’s total failure to investigate or analyze additional fea-
`
`tures of iTMS is that Demaco somehow excuses PO from considering unclaimed fea-
`
`tures. See, e.g., Opp. 4, 8. Not so. Demaco holds a patentee must show “a legally suffi-
`
`cient relationship” where, as here, the patented invention is “only a component”:
`
`When the thing that is commercially successful is not coextensive with the pa-
`tented invention—for example, if the patented invention is only a component of a
`commercially successful machine or process—the patentee must show prima facie a le-
`gally sufficient relationship between that which is patented and that which is
`sold.
`
`See, e.g., Demaco Corp v. F. Von Langsdorff Licensing, Ltd., 851 F.2d 1387, 1392 (Fed. Cir.
`
`1988). PO has made no such showing of a “legally sufficient relationship,” nor could
`
`it, having ignored every other feature of iTMS apart from those accused by PO.
`
`In snipping out a later Demaco statement that a patentee need not prove that
`
`“commercial success is not due to factors other than the patented invention” (Opp. 4),
`
`PO ignores the point of that passage: “It is sufficient to show that the commercial
`
`success was of the patented invention itself.” Demaco at 1394. And these “other” factors are
`
`not, as PO implies, additional features not accused of practicing the alleged invention, but “ex-
`
`2
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`
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`Case CBM2013-00023
`Patent 5,966,440
`traneous factors other than the patented invention, such as advertising, superior
`
`workmanship, etc.” Demaco at 1393. Contrary to PO’s argument, Demaco does not ex-
`
`cuse PO from demonstrating either “co-extensiveness”—which Mr. Snell has not
`
`done—or “a legally sufficient relationship”—which Mr. Snell never even tried to do.
`
`III. PO’s Position That Content is “Irrelevant” is Untenable and Contradict-
`ed by PO’s Own Documents
`
`PO does not dispute that Mr. Snell never investigated or analyzed the level of con-
`
`tent available on SightSound.com, or that he did not investigate or even opine on the
`
`role of those differences in explaining the respective commercial success of iTMS and
`
`SightSound.com. See, e.g., EX4366 133:13-25, 138:22-139:5, 161:18-163:10. 186:8-
`
`191:11; EX4369 16 (Depo Ex. 10); Mot. 9-11. Further, PO does not even try to rebut
`
`or explain SightSound’s own contemporaneous statements that SightSound.com suf-
`
`fered commercially as a result of its lack of compelling content. E.g., EX4414 ¶¶ 34-50;
`
`EX4361 2-5, 10; EX4358 9-10; Mot. 10. Instead, PO flatly claims that content is “ir-
`
`relevant” (Opp. 9)—but even SightSound recognized that the opposite was true. See,
`
`e.g. EX4361 5 (“Many potential investors were concerned about the lack of available
`
`compelling content. . . . [C]ontent was the key missing ingredient.”), 10 (likening
`
`SightSound’s offerings of “largely unknown independent titles” to “building [a] shop-
`
`ping center and not having any tenants”); EX4358 5 (“Dependence on High-Quality Video
`
`and Audio Content”), 6 (“[I]f the Company’s offerings do not achieve and/or sustain
`
`market acceptance, the Company’s business, operating results and financial condition will be
`
`3
`
`
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`Case CBM2013-00023
`Patent 5,966,440
`materially adversely affected.”). The suggestion that the goods available for sale in a store
`
`are “irrelevant” to the store’s commercial success is nonsensical, and cannot excuse
`
`Mr. Snell’s failure to even consider content.
`
`IV. No Basis for Opinions Based On “Second Party” Misconstruction
`
`PO does not deny that Mr. Snell misconstrued “second party” (Opp. 9-10) and
`
`so the only remaining question is the extent to which his misconstruction taints his
`
`opinions. As demonstrated in his deposition, the misconstruction was fatal to Mr.
`
`Snell’s analysis of every challenged claim, all of which include the term “second party.”
`
`Mr. Snell predicated his opinions on his incorrect belief that the term “second party”
`
`is limited to an individual consumer, testifying that even if all other limitations were
`
`met, if the “second party” were a retailer buying from a wholesaler, the claim would
`
`not be practiced. EX4366 235:20-237:16. In his declaration, Mr. Snell similarly dis-
`
`missed CompuSonics’ DSP-2000 as a product for “professional” use. See, e.g.,
`
`EX2353 ¶¶ 49, 51, 52, 72. This testimony flies in the face of PO’s assertion that Mr.
`
`Snell utilized the constructions adopted by the Board (Opp. 9) and that none of Mr.
`
`Snell’s CompuSonics opinions were “influenced” (Opp. 10). Because the term “sec-
`
`ond party” has not and cannot defensibly be construed to exclude commercial buyers,
`
`retailers, and professionals—and indeed has not been so construed here—the Snell
`
`opinions predicated on that misconstruction are meritless. See also Mot. 11-13.
`
`V. No Basis For Opinions Based On Disagreement With The Inventor’s
`Statements Regarding The Meaning of Electronic Sale/Purchase
`
`4
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`
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`Case CBM2013-00023
`Patent 5,966,440
`PO attempts to sidestep Mr. Snell’s disagreement with inventor Hair’s prosecu-
`
`tion statements that one of skill would have understood an “electronic sale” to inher-
`
`ently involve “transferring money electronically” and “charging a fee” by “charging
`
`the account” of the buyer. Arguing that Snell applied the Board’s constructions, PO
`
`misses the point. The issue is what one of skill would have understood from the
`
`CompuSonics disclosures of, e.g., “all-electronic purchases” (EX4318 1), “symphonies,
`
`ordered by credit card” (EX4324 2) and “us[ing] credit cards to charge [] purchases
`
`over the phone lines” (EX4309 3). Mr. Hair’s own prosecution history statements
`
`confirm that one of skill would have understood these references to disclose the
`
`claimed payment steps (see, e.g., Mot. 14), yet were ignored by Mr. Snell. Mr. Snell’s
`
`disagreement with Mr. Hair explains his unreasonably narrow interpretation of the
`
`CompuSonics disclosures—e.g., that a reference to “sell[ing] direct to consumers over
`
`the telephone” where “symphonies, ordered by credit card, could travel digitally over
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`phone lines” (EX4324 2) somehow “suggests that a credit card payment would be
`
`made in writing in advance of purchase, for instance by writing down a code for a recording
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`and a credit card number and mailing it to the seller” (EX2353 ¶ 55). PO never explains
`
`how Mr. Snell’s strained narrow interpretation of the CompuSonics disclosures can be
`
`squared with Mr. Hair’s statements made to secure allowance. They cannot.
`
`April 25, 2014
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`
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`Respectfully submitted,
`
`By /J. Steven Baughman/
`J. Steven Baughman, Lead Counsel
`
`5
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________
`
`
`
`APPLE INC.
`
`Petitioner
`
`v.
`
`SIGHTSOUND TECHNOLOGIES, LLC
`Patent Owner
`______________
`
`Case CBM2013-00023
`Patent 5,966,440
`______________
`
`Before the Honorable MICHAEL P. TIERNEY, JUSTIN T. ARBES, and
`GEORGIANNA W. BRADEN,
`Administrative Patent Judges.
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that the foregoing PETITIONER APPLE INC.’S
`
`REPLY IN SUPPORT OF ITS MOTION TO EXCLUDE UNDER 37 C.F.R. §§
`
`42.62 AND 42.64 was served on this 25th day of April, 2014, by electronic mail upon
`
`Arnold & Porter LLP, counsel for Patent Owner, at david.marsh@aporter.com and
`
`
`
`
`By /Megan F. Raymond /
`Megan F. Raymond
`
`
`
`kristan.lansbery@aporter.com.
`
`Dated: April 25, 2014
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